EUR/USD Forecast Today 04/02: Drops On Tariff News (Video)

(MENAFN- Daily Forex)

• As you can see, the Euro has shown itself to be very noisy as the market gapped lower due to the noise that traders had to sift through overnight with the trump administration firing off 25% tariffs against both Mexico and Canada.
• Then, Trump suggesting that there was something coming for the EU as well.
• We have recovered quite a bit, at least enough to fill the gap, and now we've sold off a little bit.

I think what this means at the end of the day is going to be a situation where we are just fading rallies, which has been the game all along. I don't like the idea of buying the euro and I think there is a hard ceiling near the 1.05 level. With that being said, I don't even think we get that far. That doesn't mean that we can't rally for some time, and it doesn't mean that we won't have a situation where things will be volatile and noisy, but I am looking for cheap US dollars. What I mean by that is that if the market does rally and show signs of exhaustion, then I'm willing to short it.

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If we were to break down below the 1.02 level, then I think the Euro goes to parity. I think the Euro goes to parity sooner or later anyway, and really that just speeds up the whole timeline. But I think we are probably due for some sideways bouncing around right now in a consolidation range for a market that of course has been very noisy for some time and sees a major difference between the central bank policies. After all, the European Central Bank has cut rates a couple of times while the Federal Reserve is still on hold. That in itself continues to make this an intriguing position to the downside.

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